AS local and foreign investors continued to key into the new automotive policy, which seeks to encourage emergence of vehicle manufacturing plants in Nigeria, tyre marketers have opposed the five per cent import duty concession on tyres imported by local manufacturers.
Under the aegis of Association of Nigeria Tyre Marketers, they said such privilege accorded tyre manufacturers could create a monopoly in the tyre business within the country.
The President of the Association, Alhaji Issa Akanbi Mohammed and other key executive members of the group in a protest letter to President Goodluck Jonathan on behalf of tyre dealers in Nigeria few days ago, said at present, there is no company producing tyres in the country as all of them had since relocated to neighbouring countries.
According to them, ‘‘the privilege status of importation at a concessionary duty rate of five per cent will only encourage extreme monopoly to non-existing local manufacturers to the disadvantage of other stakeholders in the tyre value chain. This privileged status will also encourage massive importation by the privilege few that are close to the government under the pretence that they operate tyre manufacturing plant that do not exist.”
According to the tyre dealers, government should revive the tyre manufacturing sector by imposing zero VAT and duty on the importation of key components for the production of tyres, especially machineries and other equipment as globally adopted for the growth of the industry.
They also urged the government to implement energy efficiency measure and modernization of technological equipment at the site of tyre production, develop programme aimed at the expansion of rubber plantation.
This, they said, should include advancement of subsidy to growers, improvement of quality, financial assistance for replanting and the creations of plantations in the country.
They also emphasized the need for a pilot programme to encourage good companies involved in the tyre value chain to work together for the development of the sub-sector.”
The Federal Ministry of Finance had in February issued a circular informing the comptroller General of the Nigeria Customs Service of a revised fiscal policy for automotive industry saying henceforth, local tyre manufacturing plant ‘‘are to import tyres at five per cent duty” in numbers equal to twice their production for two years from production date.
According to the circular signed by Dr. Ngozi Okonjo-Iweala, Co-ordinating Minister for the Economy and Minister of Finance, other tyre importers will be made to pay 20 per cent duty and five per cent VAT for their own imports.